In business, it is always good to let go of your misconceptions early. One of my first field visits in an emerging market was in Istanbul, and it was an eye-opener. I expected business in Turkey to be less organized, less structured – far behind the developed markets I was used to in Western Europe, with a workforce that needed to be educated on the nuances of business. To my surprise, I found an economy that was already incredibly vital. Turkey was home to hundreds of diverse, fast-growing companies, and smart, energetic workers who all seemed to be fluent in English.
After my experience in Turkey, I learned to approach every emerging market with a fresh eye.
To be successful, you need a foundation of tru
st, relationships and personal attributes—all the things that make for deep customer connections. This idea of deep customer connections has a tangible meaning in emerging markets. There are two reasons for this. One is that most emerging-market economies haven’t gone fully electronic — a lot of basic business communication (such as generating quotes and negotiating prices) is still done in person. Also, the majority of emerging-market companies fall into the small- and medium-sized enterprise category — they can’t afford to bet on a vendor who won’t be there for them in a pinch. If something comes up, they want to believe that nothing is more important to you than their problem.
How a local management team creates this trust varies with the country — and to some extent, with the customer. But it starts with being out in the market to hear their concerns — that’s the number one thing. And if you can help customers in ways they don’t expect, you’ll have an edge in the market that may make a big difference.
If I had to boil down my philosophy of operating in emerging markets to just a few points, it would be these:
- Think local. At its most basic, this means hiring people from within the country to head the operation and do the work. Expatriates typically don’t speak the language fluently, and even when they do, they miss nuances of communication, culture and custom. To be sure, identifying, training and developing capable people is a big HR challenge. But it’s a challenge that must be met if your company is to succeed in an emerging market.
- Engage with the market. Many developed-market companies now entering countries like India, South Africa and Chile pride themselves on their systems, organizations and processes. I wouldn’t say these things don’t matter in emerging markets, but they’re less important than having visible, charismatic managers who like interacting with customers and prospects.
- Minimize the bureaucracy. Big companies are bureaucratic by nature, but they should look for ways to simplify processes so their country teams have more time to focus on the business.
- Capitalize on your brand. This isn’t the first thing to try to do in an emerging market and there is no guarantee that a brand that resonates in one part of the world will resonate in another. Still, the brand can help you if people in a new country associate it with positive qualities — reliability, trust, concern for the environment. When you combine a reputation like that with a truly local operation, it can open a lot of doors.
By Hervé Tessler, President, Developing Markets Operations, Xerox
(This is an excerpt from an article that was first published in XeroxVoice.)